TAKKT sales exceed EUR 1 billion for the first time - Management Board proposes change in dividend policy

DGAP-News: TAKKT AG / Key word(s): Preliminary Results

2016-02-18 / 07:30
The issuer is solely responsible for the content of this announcement.

TAKKT sales exceed EUR 1 billion for the first time - Management Board proposes change in dividend policy

- Organic consolidated sales up 4.7 percent, reported sales up 8.5 percent

- Management Board proposes a change in dividend policy to the Supervisory Board as well as a dividend distribution of EUR 0.50 (previous year: 0.32) per share

- EBITDA margin of 14.8 percent (14.0 percent) in upper range of target corridor

- Significant increase in earnings per share of EUR 1.24 (1.00).

- TAKKT cash flow rises to EUR 114.2 (98.7) million

- Post-Up Stand and BiGDUG acquisitions show good performance

Stuttgart, Germany, February 18, 2016. TAKKT was able to increase consolidated sales over the previous year organically (i.e., adjusted for currency as well as disposal/acquisition effects) by 4.7 percent in the 2015 financial year. The financial year was once again characterized by very different business developments in the core markets of Europe and North America. Reported consolidated sales rose by 8.5 percent to EUR 1,063.8 (previous year: 980.4) million, exceeding the EUR 1 billion threshold for the first time.

"It is the first time in the history of our company that we have sold over EUR 1 billion in products - another important milestone that we are proud of. In addition to the organic increase in sales, both of the acquisitions made during the financial year contributed to our growth. We are at the upper end of our initial expectations for the 2015 financial year," remarked Felix Zimmermann, CEO of TAKKT AG, on the past financial year.

Improved profitability due to portfolio effects
The gross profit margin in the year under review was the same as in the previous year at 42.6 (42.6) percent: The company acquisitions Post-Up Stand and BiGDUG as well as the disposal of the Plant Equipment Group (PEG) had a positive effect. At the same time, however, the stronger growth of the TAKKT AMERICA segment had an opposite effect on the gross profit margin of the Group due to structural factors.

EBITDA (earnings before interest, taxes, depreciation and amortization) of EUR 157.3 (137.3) million was significantly over the previous-year figure. The increase is attributable to the organic growth and to the currency effect resulting from translation of the strong US dollar and the Swiss franc to the reporting currency of euros, the contribution to the result from both of the newly acquired companies and income from the deconsolidation of the PEG. The EBITDA margin came to 14.8 (14.0) percent, placing it once again at the upper end of the target corridor of 12 to 15 percent. Without the one-off income from the deconsolidation of PEG, the EBITDA margin in 2015 came to 14.5 percent. The higher margin is mainly attributable to the sale of the less profitable PEG, which had dampened profitability in the previous year. Earnings per share increased significantly to EUR 1.24 (1.00).

The TAKKT cash flow (the profit for the period plus depreciation and amortization, impairment of non-current assets and deferred taxes affecting profit and loss) amounted to EUR 114.2 (98.7) million. This corresponds to a cash flow margin of 10.7 (10.1) percent and a TAKKT cash flow per share of EUR 1.74 (1.50).

Management Board proposes change in dividend policy
"Due to the excellent earnings quality and cash flow strength of our business model, the Management Board of TAKKT AG has decided to put forward a proposal to the Supervisory Board to change the dividend policy to a future payout ratio in a corridor of between 35 and 45 percent of the profit for the period," announced CFO Claude Tomaszewski. The dividend corridor would replace the existing dividend policy in its entirety. TAKKT had generally paid out 30 percent of the profit for the period as an ordinary dividend but not less than the ordinary dividend of the previous year. The existing provision also included the distribution of an additional special dividend if the total equity ratio reached or exceeded the upper end of TAKKT's own target corridor of 30 to 60 percent.

As a consequence of the proposed change of the dividend policy, the Management Board of TAKKT AG also resolved - subject to the approval of the Supervisory Board - to propose to the Shareholders' Meeting on May 10, 2016 a dividend payout of EUR 0.50 (0.32) per share for the 2015 financial year. This corresponds to a payout ratio of 40 percent of profits for the period. "With the change in our dividend policy we strive for a dividend stream that is as consistent and reliable as possible and also want our shareholders to participate to a greater degree in TAKKT's success," explains Felix Zimmermann about the future provision.

TAKKT EUROPE: Subdued development in both divisions
Organic sales in the TAKKT EUROPE segment increased by 0.7 percent in the 2015 financial year. Reported sales increased by 3.6 percent to EUR 538.3 (519.8) million. In the previous year, the Topdeq company realized sales in the course of the phase-out process with no corresponding sales in 2015. In contrast, the acquisition of BiGDUG and the stronger Swiss franc had a positive effect on reported sales.

Performance of the Business Equipment Group (BEG) was positive in Southern and Eastern Europe as well as Scandinavia but restrained in other markets. Inhibited by the general reluctance to invest in the Swiss market, the division achieved only slight organic growth. The Packaging Solutions Group (PSG) also realized only slight organic sales growth as a consequence of the rather restrained trend in the German market. Ratioform acquired 100 percent of the shares of its former franchise partner in Austria effective January 1, 2016.

The EBITDA margin of the segment was below the previous year's level at 18.3 (19.1) percent. This is mainly attributable to the modest sales development of TAKKT EUROPE.

TAKKT AMERICA: Above-average sales growth
Organic sales in the TAKKT AMERICA segment increased by 10.0 percent due to the good economic environment in North America in the 2015 financial year. Reported sales rose by 14.1 percent to EUR 525.8 (460.9) million. This was driven primarily by the positive currency effects resulting from translation of the strong US dollar to the reporting currency of euros. A positive portfolio effect resulted from the acquisition of Post-Up Stand and a negative effect from disposal of the PEG division as of January 30, 2015. The Office Equipment Group (OEG) as well as the Specialties Group (SPG) reported organic sales grow in the low double-digit percentage range, whereby OEG performed somewhat better than SPG.

The EBITDA margin of the segment came to a markedly improved 13.1 (10.3) percent. After adjusting for the aforementioned effect on earnings from the sale of the PEG, the margin came to 12.5 percent in 2015. The good business development, the phase-out of the less profitable PEG business and the acquisition of Post-Up Stand had a further positive effect because the new US company realized an above-average EBITDA margin.

Strong final quarter 2015 with organic growth of 5.2 percent
In the fourth quarter of the year under review, consolidated sales increased organically by 5.2 percent and reported sales by 8.2 percent to EUR 275.2 (254.3) million. Organic growth in the final quarter came to 2.6 percent in the TAKKT EUROPE segment while TAKKT AMERICA recorded an organic increase of 8.8 percent. EBITDA for the Group increased to EUR 38.7 (32.1) million and the corresponding margin to 14.1 (12.6) percent.

Outlook: Continuing organic growth
"We are confident that the good development will continue in the 2016 financial year. In Europe especially, we expect to see an improvement of the economic environment. The TAKKT AMERICA segment, however, will most likely remain our most important growth driver. Overall we predict a continuation of the organic growth with corresponding high profitability," commented Zimmermann on the preliminary outlook for the 2016 financial year. "However, we cannot exclude that the current turmoil in the financial markets will impact the sentiment and the investment behavior of the real economy."

TAKKT will give further details on the 2015 consolidated financial statements and assessment of future business development with the publication of the 2015 annual report on March 17, 2016.

Conference call
We would like to invite you to address your questions to the Management Board. We will be hosting a conference call for this purpose at 3:00 p.m. (CET) on February 18, 2016. To take part, please dial the following number: +49 69 2222 3250 (access code: 779134#).

Preliminary IFRS figures for the TAKKT Group for the 2015 financial year
(in EUR million)

Change in % FY
Change in %
TAKKT Group sales 275.2 254.3 +8.2 1,063.8 980.4 +8.5
Organic growth     +5.2     +4.7
TAKKT EUROPE 147.5 135.1 +9.1 538.3 519.8 +3.6
TAKKT AMERICA 127.8 119.3 +7.1 525.8 460.9 +14.1
EBITDA 38.7 32.1 +20.7 157.3 137.3 +14.6
EBITDA margin (%) 14.1 12.6   14.8 14.0  
EBIT 31.1 25.2 +23.1 129.4 110.8 +16.8
EBIT margin (%) 11.3 9.9   12.2 11.3  
Profit before tax 28.5 22.8 +25.2 119.9 99.3 +20.7
Pre-tax profit margin (%) 10.4 8.9   11.3 10.1  
TAKKT cash flow 27.4 23.7 15.6 114.2 98.7 15.7
TAKKT cash flow margin (%) 10.0 9.3   10.7 10.1  

TAKKT is the leading B2B direct marketing specialist for business equipment in Europe and North America. The Group is represented with its brands in more than 25 countries. The product range of the TAKKT subsidiaries comprises more than 300,000 products for the areas of plant and warehouse equipment, office furniture, transport packaging, display articles, equipment for retailers, the food service industry and the hotel market.

The TAKKT Group has over 2,000 employees and just under three million customers worldwide. The company is listed on the SDAX and Deutsche Börse Prime Standard.

Dr. Christian Warns Tel. +49 711 3465-8222
Giuseppe Palmieri Tel. +49 711 3465-8250
Email: investor@takkt.de

2016-02-18 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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